Xbox Live user says Microsoft owes him $500 billion

An Arkansas man is trying to get Microsoft to pay him $500 billion after he tried to amend his Xbox Live contract with the company and was ignored when he asked for legal arbitration.

With a motion filed Monday in federal court in Seattle, gamer David Stebbins is trying to confirm the exorbitant arbitration award from Microsoft. Representing himself, he spends much of his filing explaining in legalese why the district court cannot nullify the $500 billion payment.

Here’s how it happened. As a user of Xbox Live, Microsoft’s online network for the Xbox 360 gaming console, Stebbins entered into a contract with Microsoft. Since such a contract is binding on both Microsoft and an Xbox Live user, Stebbins decided to try something radical.

On May 6, he “submitted a notice” to Microsoft that he was “unilaterally amending the terms of service,” and if Microsoft did not terminate his Xbox Live membership, such changes would take effect in 10 days. Microsoft did not terminate his membership, Stebbins says, so he argues Microsoft accepted the new contract through inaction.

As he points out, companies often employ the same strategy with consumers. For example, if a company notifies a customer of a change in service contract terms, it can be assumed that the customer agreed to the new terms by continuing to use the service, Stebbins argues.

So, after Microsoft “agreed” to the new contract, Stebbins says, on May 18 he invited the company to arbitrate a legal dispute in which he claimed $500 billion in damages. He says that he included in his notice a “forfeit victory clause,” which stated that if Microsoft didn’t respond within 24 hours, Stebbins would automatically win.

“As you probably guessed,” Stebbins wrote in his motion, “the Defendants did not accept the invitation to arbitrate within 24 hours of receiving it. Therefore, I automatically won on May 19, 2011, per the forfeit victory clause.”

Meanwhile, a search on the federal legal database shows Stebbard has filed more than a dozen legal claims within the past year. In some of them, he alleged discrimination by companies – including WalMart – that refused to hire him, claiming it was because of his Asperger syndrome. In others, he attempted similar stunts related to contract arbitration.

Many of the cases were quickly dismissed. Others are still open – likely because there hasn’t yet been time for a judge to dismiss them.

“Yes, I’ve sued ‘numerous organizations,'” Stebbins said in an email interview with seattlepi.com. “What of it? I do not see how this means that my cases are frivolous.

“In fact, I see a lot of friends and family who get pushed around and walked on, who have causes of action against them, but they choose not to pursue those causes of action. Lots of people are victims of torts … few of them actually sue over them, but that doesn’t mean they can’t.

“I, on the other hand, will not let people push me around, just because I’ve already filed a bunch of claims, already.”

Some might see Stebbins as abusing the court system. But he sees himself as trying to give a voice to the little guy.

Asked why, after his previous legal attempts, he turned his cross hairs on Microsoft, Stebbins wrote: “My true goal is not to just harass, and it’s not just to get rich. My true goal is to level the playing field.

“I’m trying to give employees, consumers, and generally, people who’ve been economically disadvantaged a new, powerful tool to protect themselves. Who needs to go crying to Congress for more workers’ rights and consumer protection laws?! We can do it all ourselves! How’s that for a motive you can get behind?!”

Meanwhile, in his motion against Microsoft, Stebbins explains that he “will not be presenting any exhibits in paper format. To do so would put an undue strain on my printer. If it is not too much of an inconvenience, I wish to simply provide a link to a webpage.”

So he created a YouTube video with screenshots of the contract amendments and the arbitration invitation he emailed to Microsoft.

And there’s the rub. (Well, it’s one of the rubs.) In its Xbox Live terms and conditions, Microsoft clearly states that it will not accept notices by email. Though Stebbins says his contract offer was a different thing altogether.

However, nowhere do the terms state that an Xbox Live customer cannot attempt to change the contract. The contract explains that Microsoft is not liable for damages worth more than one month’s Xbox Live fee (or about $5 – an Xbox Live Gold subscription costs $60 a year), nor for any claims related to the contract.

But it doesn’t say the contract cannot be amended by the customer.

The case is likely to go nowhere. And fast. Especially since Stebbins appears to have engineered it all in a way that kept the right people at Microsoft from knowing about his claims.

“Honestly, I haven’t heard much from Microsoft … although that shouldn’t come as too much of a surprise,” he wrote to seattlepi.com. “I mean, think about it: When I mail these documents to Microsoft, they won’t go to any legal division; I arranged for the mailings to be picked up by the employee that just collects regular mail! It’s quite possible that these employees won’t understand the legal significance of these documents, and know that they’re required to respond.”